The number of consumers who reported stolen cryptocurrency has increased substantially with reported losses of over $110 million in just 2023. As online fraudsters continue to become more savvy and cryptocurrency grows in popularity, knowing what to look out for to protect yourself and your funds is essential.

Here are four common Bitcoin phishing scams and how to avoid them.

1. Suspicious links and fake websites.

The FBI Internet Crime Report (ICR) notes that in the past two years, nearly 600,000 people fell victim to phishing scams. In total, those people lost over $70.8 million. A phishing scam is when a cybercriminal sends an email or text message to lure individuals to a fraudulent website asking them to enter private information. When it comes to BTM fraud, fraudsters may send a fake security warning to your computer, often impersonating a well-known company such as your bank or Microsoft. Be cautious of any messages sent by a contact you do not recognize and do not click on any suspicious links. 

As a reminder, FirstBank will never ask you to lie about the purpose of your monetary transaction or ask you to convert funds into virtual currency.

2. Impersonation.

According to new data from the Federal Trade Commission, the number of Bitcoin ATM (BTM) scams has increased by 900% over the last three years, with a median loss of $10,000. BTMs are electronic kiosks that allow customers to make financial transactions with cryptocurrency rather than cash. Since 2021, when cryptocurrency’s popularity skyrocketed, BTMs have started to appear in convenience and grocery stores. In fact, there are approximately 31,000 BTMs and tellers across the United States. 

Fraudsters will often pose as a government or bank professional and contact you via email or over the phone. They’ll claim there’s suspicious activity on your account and the only way to protect your funds is to withdraw it and deposit into a BTM. However, once you deposit the cash, it goes straight into the fraudster’s wallet. While some threats or conversations may seem real, you should never withdraw cash in response to an unexpected call or message. Instead, you should 1) report the scam to your bank 2) file a claim at ReportFraud.ftc.gov and 3) end all communication with the fraudster.

While this scenario involves withdrawing and depositing cash, fraudsters will suggest several payment methods to trick you. Whether they’re asking you to send money via wire, electronic funds transfer (EFT), Automated Clearing House (ACH), peer-to-peer (P2P) payment apps like Cash App, etc., you should always proceed with caution and never send money to someone you don’t know.

3. Romance scams.

According to the FBI ICR, nearly 18,000 people fell victim to online romance scams in 2023. Once a fraudster has made a personal connection with their victim, it’s easier for that individual to trust them and either share sensitive information or send them cryptocurrency funds directly. To avoid falling victim, don’t give out personal information or send money to someone you’ve never met in person — even if it may feel like you have a genuine relationship. If you are asked to send money through any channel using cryptocurrency to help the person monetarily, that’s an indicator they may be trying to steal your funds.

4. Investment scams.

Investment scams occur when a fraudster tries to scam you into buying a fake investment, such as stocks, bonds, currencies, or even real estate. One of the most common investment scams targeting cryptocurrency is called “pig butchering.” Fraudsters will create fake profiles and reach out to potential victims via text message, social media, WhatsApp, Tinder or other dating sites. They will convince their victim to invest in crypto, directing them to a fake website or app controlled by the fraudster. Read “4 Investment Scams to Watch Out For” to learn more.

What to do if you fall victim to Bitcoin scams.

• If you believe your personal or financial information has been compromised, immediately contact your bank by visiting the website or calling the phone number on the back of your debit card. 
• Never rely on or use the information provided in an unexpected call or message. This information will only take you back to the fraudster.
• Report this fraud with the Federal Trade Commission at ReportFraud.ftc.gov and provide them with as much detailed information about your interaction as possible.

With the increase in Bitcoin scams, it is essential to be vigilant of potential threats. If something feels off, trust your gut and seek advice from a fraud representative who can help you.

For more helpful resources, visit the Fraud Prevention page at efirstbankblog.com.

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